Delay in releasing ADC fund costs Govt Rs 1.64 cr

SHILLONG: The District Council Affairs Department’s failure to ensure timely release of the Thirteenth Finance Commission grants to the three Autonomous District Councils (ADCs) resulted in avoidable interest payment of Rs 1.64 crore, a report by the Comptroller and Auditor General has revealed.
The CAG report stated that according to the guidelines issued by the Ministry of Finance in September 2010, the State government should transfer the funds to ADCs and urban local bodies (ULBs) within five days of receipt from the Centre in case of States with easy accessible banking infrastructure and 10 days in case a state does not have access to proper banking infrastructure.
According to the report, any delay required the State government to release the installment with interest at the bank rate of RBI for the number of days of delay and this was applicable from the second installment of 2010-11 onwards.
A scrutiny of records of the District Council Affairs Department in February 2016 for the period from November 2010 to September 2015 revealed that the Centre released the second installment of Rs 21.62 crore under the  FC-XIII for 2011-12 on March 31, 2012.
The Department, however, between March and August 2013, released the balance amount of Rs 21.62 crore to the three ADCs after a delay of 345 days beyond the stipulated period.
The audit further showed that though the department released the second installment of Rs 21.62 crore to the three Councils even before the submission of utilisation certificates for the first installment, the Finance Department incorrectly informed the Government of India that the amount was withheld since the three ADCs did not submit the UCs.
The report added that the Department neither released the funds to the ADCs within the stipulated time nor did it enforce submission of UCs for the first installment prior to releasing the second tranche.
The Centre, however, advised that the State had held back the ADC funds for 345 days and needed to pay Rs 1.64 crore as interest to the Councils.
It also advised that a copy of the sanction order for Rs 1.64 crore be sent to the Government of India for release of the next installment and accordingly the Finance Department, in July 2013, sanctioned and released Rs 1.64 crore as payment of interest to the three ADCs.
The Department in May 2016, while referring to the portion of guidelines issued by the Centre, replied, “Release of any installment will be subject to an utilisation certificate for the previous installment drawn.”
The reply was not tenable as the Department released the second installment even before they submitted the UCs for the first one.